Time Warner Officially Announces AOL Split

After much speculation, Time Warner officially announced Thursday that it will spin off AOL into an independent company.

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After much speculation, Time Warner officially announced Thursday that it will spin off AOL into an independent company.

"We believe that a separation will be the best outcome for both Time Warner and AOL," Time Warner chairman and CEO Jeff Bewkes said in a statement. "The separation will be another critical step in the reshaping of Time Warner that we started at the beginning of last year, enabling us to focus to an even greater degree on our core content businesses."

Time Warner believes AOL will perform better as an independent entity and the spinoff will give both companies "greater operational and strategic flexibility," Bewkes said.

After the deal is complete, AOL will be a publicly traded and independent company with a focus on growing its Web brands and services, Time Warner said.

"Becoming a standalone public company positions AOL to strengthen its core businesses, deliver new and innovative products and services, and enhance our strategic options," said AOL chairman and CEO Tim Armstrong. "We play in a very competitive landscape and will be using our new status to retain and attract top talent."

Armstrong acknowledged that AOL has "a tremendous amount of work to do" but pointed to the company's global brand, employees, and "passion for the future of the Web" as its key assets.

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Revenue at AOL fell 23 percent to $867 million during the last quarter.

Time Warner currently owns 95 percent of AOL and Google owns 5 percent. Under a previously arranged deal, Time Warner will purchase Google's stake in AOL in the third quarter of 2009. After the deal is done, Time Warner shareholders will own all of the outstanding interests in AOL.

AOL, then known as America Online, Inc., announced in 2000 that it would merge with Time Warner in a deal estimated at $182 billion.

Chloe Albanesius has been with PCMag.com since April 2007, most recently as Executive Editor for News and Features. Prior to that, she worked for a year covering financial IT on Wall Street for Incisive Media. From 2002 to 2005, Chloe covered technology policy for The National Journal's Technology Daily in Washington, DC. She has held internships at NBC's Meet the Press, washingtonpost.com, the Tate Gallery press office in London, Roll Call, and Congressional Quarterly. She graduated with a bachelor's degree in journalism from American University...
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